Category: Finance.
Short sales are becoming a big part of the Southern California real estate marketplace. The first big challenge in pursuing a short sale is finding a broker willing to put the work in.
Many agents, do not understand, let alone buyers short sales and then tend to avoid them. Most don t want to show these for many reasons. Let me explain these three challenges in order. The big three of which are short sales are much more difficult, buyers get very impatient, and the whole situation is often stressful. First, short sales are more difficult because in the place of a two party situation with just a homebuyer and homeseller, you have a four party transaction with the buyer, and two banks, seller. The current owner is upside down financially and really wants the pressure of their back. And in this situation the seller and two banks don t act the way a traditional homeseller would act.
They don t always care about getting the best price which is great for you. Meanwhile, the banks aren t the homeowners, adhere to certain negotiating and can be difficult to get on the phone and negotiate with. But the homeowner can also work a little against the purchase occassionally by not showing the house in the best condition or even at all. Bank personnel often utilize agressive type methods in their efforts to maximize the absolute most money. And getting access to those closers require completed paperwork packages from the seller and an purchase contract from a potential buyer before the clock begins to tick. In fact, the first and second loans negotiate between themselves because what one institution gets financially the other doesn t. Eventually there has be an agreement between two banks, and a buyer, a seller.
Plus with the significant amount of short sales nowadays many banks are understaffed to handle the workload. By the time you get this all set, a period of 2- 3 weeks can easily pass. Once you are past that issue, the next aspect is buyer impatience and lack of comprehension. Because after the agent has everything in to the banks, the banks will take 10- 14 working days to even examine it and pass it to a bank closer or negotiator. The most difficult type of buyer for a short sale is often an excited first time homebuyer unless they have a strong understanding with their broker. Preparing an excited buyer to wait this out is tough. Plus, buyers today have everyone they know in their ear whispering that they should get better response time or more whatever when they buy.
This is especially true in Menifee and neighboring real estate marketplace when there are a large supply of properties to look at. Buyer lack of patience can be the paramount concern and should be discussed before any bank short sale properties are visited. Here is an recent situation. If the homebuyers have the ability to be patient, they can get a huge discount! Last month I pointed out a house in Wildomar CA for bank short sale to a buyer of mine where they could get a house for over 70k off the its real value. The listing was perfect for the couple and was turnkey condition.
But they would to have to wait a bit for bank approval, perhaps as long as 2- 3 weeks. Their reaction was in this market they insisted on getting a response inside of 48- 72 hours. They are 8- 5 employee s and have no personal interest in the property and if you want to miss a great investment, that is your choice. I risked my client contact and said this deal isn t for you because the bank employees don t care about your needs. But I am willing to put in the work if you can have the patience. After breaking out the details, they put in an low priced offer contract, and will close, received bank approval at the end of this month.
And if we get it, you will be happy and enjoy significant equity and I will earn your business and referrals for the future. Good lines of communication, and patience are, integrity all you need! Some of this has already been mentioned when dealing with patience. The last big issue is stress. However, the stress of what the bank will do, what people are telling you, and how frustrating the process is can drive you nuts. For the client, not taking out your stress on your broker is important. For the broker, working with the other agent and banks is downright tough.
Much of the possible stress is relieved by a solid comprehension about the situation and a periodical update two times a week. With all that said, why do I recommend examing bank short sales? If the buyer finds out that the banks haven t moved, they shouldn t get upset. Because bank short sale listings can be a fantastic chance to get a great new home at a significant price. Also, they can be great for price negotiation for many of reasons. Short sales homes are usually in much better shape than REO homes and often they are actively being cared for.
Currently, banks are overflowing with in default properties and the last thing they want is another, especially when there is a qualified buyer ready to buy. Their loss is your gain and your broker s goal is to get you, the best situation, the client possible for today and deserve your business the next time. Why would a bank want to gain another when given the chance to sell one while more expenses add up or the market goes down further?
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